Thursday, 6 October 2011

Supermarket 'law shops' to sell legal services

Banks and supermarkets are to be able to sell consumer legal services in England and Wales for the first time following a change in law.

The government says the new Legal Services Act will offer more choice and better value for the public.
It says it also means law firms will benefit from investment and allow them to explore new markets.
But critics have said it would undermine the quality and independence of advice.
The government says the change would encourage economic growth in the industry and raise the profile of the UK as a first-class legal services market.
Justice Minister Jonathan Djanogly said it was a "landmark day" for the legal industry.
"Our legal services are already rated among the best in the world, used by millions of people around the globe as well as in the UK, and these changes will set them up to move to new heights. They will enable firms to set up multi-disciplinary practices and provide opportunities for growth," he said.
"Potential customers will find legal services become more accessible, more efficient and more competitive."
Legislation and regulation has restricted the management, ownership and financing of firms providing legal services for hundreds of years.
Under new trading bodies, known as Alternative Business Structures (ABS), lawyers will be able to work in mixed-practices offering financial, legal and other advice, or be based at different kinds of businesses.
The first of the new legal businesses will be conveyancer-led, covering services such as property law and probate.
Solicitors will not be able to participate in the new arrangements until licensing by the Solicitors Regulation Authority takes place. Currently, solicitors chambers are owned by the lawyers themselves under partnerships.
The changes could also see barristers, who are currently self-employed, eventually form partnerships themselves, or take on individual roles within the new legal businesses, the Bar Standards Board says.
The Council for Licensed Conveyancers will license the first tranch of externally-owned and managed law firms.
Its chief executive, Victor Olowe, said: "We have over 20 years' experience in regulating the licensed conveyancing profession and we will be extending the same rigorous but proportionate approach to the regulation of ABS.
"We believe that ABS is good news for consumers. Opening up the market will offer people a greater choice of legal service provider, while at the same time our new risk-based and outcomes-focussed approach to regulation will help ensure high standards of service, and will maximise consumer protection."
Critics have dubbed the act, first drafted under the previous Labour government, "Tesco Law". The move came under attack from some lawyers, including a coalition of about 100 firms, when it was first announced in 2009.
The QualitySolicitors.Com grouping said it could wipe out good quality, local legal advice.
Meanwhile, Clive Sutton, of the Solicitors Sole Practitioners Group, urged the government to reconsider the "untried and untested innovation" which he said had only previously been adopted by two states in Australia.
He said: "The government seem unconcerned that the introduction of Alternative Business Structures puts at risk the independence of legal advice, via the profit interests of commercial owners."
Despite the title Tesco Law, the supermarket has said it has "no current plans to offer legal services". But the Co-operative was among the first stores to say it was interested in offering a legal business.
Similar legislation was passed in Scotland in October 2010 when MSPs at Holyrood backed its Legal Services Bill.